Loria's Partners Allege Fraud

July 16, 2002|By Sarah Talalay Staff Writer

The 14 minority partners in the Marlins ownership group plan to file suit today against principal owner Jeffrey Loria and top Major League Baseball executives, claiming they were defrauded when baseball tried to eliminate their former team, the Montreal Expos.

The partners, representing 14 Quebec businesses, claim they were unwittingly included in baseball's plan to buy the Expos from Loria -- so the team could be contracted or moved -- and allow Loria to buy the Marlins for $158.5 million from John Henry, who became principal owner of the Boston Red Sox.

As a result of the complex offseason team swapping, the Canadian partners were included in Loria's ownership group when he sold the Expos and took control of the Marlins in February.

The partners, who own about 6 percent of the Marlins, plan to file a lawsuit under the federal anti-racketeering statute in federal court in Miami this morning and their lawyers, from the Manhattan firm Weil, Gotshal & Manges, will hold a news conference in New York.

"The basis of the claim is that they participated in a conspiracy to defraud the Canadian owners of the Montreal Expos and plot to eliminate Major League Baseball from Montreal," said Jeffrey Kessler, one of the attorneys representing the Canadian businessmen. "As much as we all love Florida, these Canadian owners did not plan on owning any percentage of the Marlins, but rather intended to maintain their ownership of the Expos."

Kessler said the partners didn't know they had been included in the Marlins ownership group until they read it in the newspaper.

"These companies were dedicated to keeping baseball in Montreal," Kessler said. "They never would have entered into any transactions with Mr. Loria had they known what his plans were."

The partners, who claim that Loria diluted their interest in the Expos from 76 percent to about 6 percent and never intended to keep the team in Montreal, are seeking to prevent baseball from moving the Expos or disbanding them. The Associated Press reported that the lawsuit also asks for compensatory damages, which are tripled, and $100 million in punitive damages, according to a person close to the lawyers.

In addition to Loria, others to be named in the suit are his stepson, Marlins President David Samson, Baseball Commissioner Bud Selig and MLB Chief Operating Officer Robert A. DuPuy.

Samson and DuPuy both declined to comment Monday night, as they had not seen the lawsuit.

The plaintiffs include Esarbee Investments Ltd., a company whose principal is Stephen R. Bronfman, son of former Expos controlling partner Charles Bronfman.

Baseball had planned to disband the Expos and the Minnesota Twins before this season but was derailed by legal challenges. Baseball put off contraction until at least 2003.